Build a Million Dollar Roth: Deadline April 18th

Welcome to a live broadcast today talking about an important tax and wealth building strategy. My name is Mark Kohler. I'm a CPA attorney, bestselling author, podcaster, YouTuber. Hey, I'm here for you. I'd really like you to put any questions you have in the chat. Please pay attention to this. This is about saving money right now, whether you're 20 years old, 30 years old, 50 years old, any age. There's an important deadline next week that you've got to know about. So I want to break it down. Answer questions regarding your tax strategies before April 18th. And it's hard to get straight answers out there. So I want to make it simple to understand for you out there that are tax advisors. I know I have many followers that are enrolled agents, CPAs and tax preparers. I'm here for you if you've got an issue you want to like. Mark, I want to push you on this. I want to ask you a quick question. I'm here for you guys. So for the next 30, 45 minutes, we're going to try and knock this out. Now, Tristan in the studio here. He will be fielding questions. Or is it Patrick? Want to just make sure. We're going to make sure. We got a team ready to field your questions. Also, ignore any stupid posts on Facebook about some bitcoin special or whatever. I am not posting today. Do not click on anything from anybody that's referring to some scam. Oh, guess how much money I made their bots. It's disgusting, it's terrible, and it's a scam. Just focus here. Type a question if you have one. And I'm here for you. Now, we're going to go to the whiteboard as necessary. And I think I'm on the whiteboard now. Tristan, would you look at that? Which we don't want. All right, so let's make sure we're good to go. So here's the. I want to hit several points here for all of you, and then I'll just open it up for Q and A. I'm here for you. Number one, April 15th is your normal deadline, but April 15th this year is on a Saturday. Then we have a federal holiday on Monday. And so what the IRS does when that happens is they kick it. So we are really not having to worry about filing our tax returns until April 18th. So that's point number one. Number two, do not worry about filing an extension. Filing an extension does not cost you any money. Now, you want to send in what you think you might owe, and if you're due a refund or you think you normally get a refund and you don't think you owe, then don't worry about it. Just send in the extension if you're not ready to file. Don't ruin your weekend. I like to tell my tax advisors that helping their clients make good decisions and drum up all the write offs is far, far, far more important than you guys freaking out and rushing to file your tax returns by April 18. And let me give you an inside tip here. The IRS assigns audits bill based on a budget and a quantity based on the district in the country. As tax returns come into the system at the irs, the different districts will assign audits. Once they hit the quota for that district, they're done. The only other audits are assigned is when there's an abnormal or anomaly when your tax return goes through the system in the computer database, which might be a year from now. So the later you file your taxes, the less chance of you have of an audit. This is common knowledge. All of the accountants out there, you know this. It's okay to extend over the years. Our accounting firm would probably extend 60 to 70% of the tax returns and take the time to prepare them properly and get more information from the client. So everybody, the moral of the story is do not freak out this next 10 days about filing your tax return on time. File an extension form 4868 and kick it. It's okay if you have more information about it. It's easy to google and figure out. I've got articles on this and what you might want to send in deposit wise. Now third point, there are some deadlines you cannot extend and one of them is the topic today and that is funding your Roth ira. Now I just want to say this to everybody. I don't care how old you are, whether you're 5 years old or 95 years old. By the way, if I have a 5 year old watching, love Rachael Ray. Okay, now for those of you any age, all of us should be funding our Roth ira. You can still have a Roth even if you have a day job or 401k. You can even have a Roth if you're married to someone and you don't have a day job but your spouse does. You can have a Roth as long as you have earned income at any age. You can have a Roth no matter how much money you make. Those are the facts. And so whenever I can get a hold of a 25 year old and say please fund your Roth IRA, it's only $500 a month. $6,000 a year is what you could put in last year. And if you missed it, let's sell anything in your garage, sell any crap you have, pull any money out of savings and you have until April 18th to put in your six grand for last year. Now when I was just running the math, now I'm just using a 25 year old as example. We could run this for 35 year olds, 45 years old, 10 years old, whatever. But just the math, it blows your mind. If you put in, if you started with 10 grand, put in 6 grand a year and had a 10% rate of return at age 60, you would have $2 million tax free. That's just 500amonth. Make it a habit, go. It's like a car payment, a nice car payment, be done with it. That's your Roth ira. And everybody, I cannot emphasize it enough to start saving. And if somebody like Mark, I can only save $50 a month, start saving $50 a month. I love Robinhood Acorns, any of these apps that help you save, love them. Start saving. So the moral of the story, and this is not a big earth shattering fact, and that's just the point to get this live off the ground, you know, off the ground this afternoon and I'd like to answer again any questions any of you have, is fund your Roth IRA and get that money starting to work for you. You can buy crypto with it, you can buy gold with it, you can buy real estate, you can buy stocks, bonds, MU funds, ETFs, whatever the hell you know, buy it, start saving and investing in what you know. Now a couple other important deadlines, sorry, deposits before the deadline. Number two is the health savings account for any of you that had a high deductible insurance policy. Whether you're single, married or single, mom, single dad, with a dependent in the home, you can put away money into a health savings account. Here's my handy dandy calculate calendar and I'm going to show you, tell you how you can get a free one today. Maybe we'll give away one or two. Your contribution for last year if you're single was $3,650. That's off the front of page of your tax return. Doesn't matter how much money you make, doesn't matter if you have a job or not. You can freaking take a write off at $3,650. You might get a refund because of making that contribution and it grows tax free and it comes out tax free for any medical expense at any age. The health savings account is the creme de la creme. It's like a Roth on steroids for health care. If you're married or head of household, it's 7,300. Now, that deposit also needs to happen before April 18th. An extension doesn't give you more time to do it. The third one, last one, is what's called the Coverdell, which is like a college ira. You can put in two grand for your kids. So any of you that have kids that are under age 18, start putting $2,000 away right now. And I'm just going to do it here on a calculator for fun. Let's say your starting balance is zero and your kid is 5 years old. And at age 20, they're going to head off to college. Okay? So I'm going to put in $2,000 and I'm going to look at a 10% rate of return. Boom. That's 200 grand for college, tax free. Now, I've got a calculator I'll be launching on my website later this week. I want you to be able to get a MarkJ Kohler.com and check out the calculator. You're going to love it. I want you to use it on a regular basis. I'll be referring it to it more and more. I used to have another calculator. I didn't like it as much. So we're designing a new calculator for all these features. So 200 grand, if you have a five year old and you can just put away $2,000 a year, that's like 150 bucks a month. And college savings would be 200 grand at age 20. That's a tax free Coverdell. I love them more than 529. Now, last point. And then I'm just going to open this up for Q and A. So, Patrick, Tristan, I don't know who's going to fill these. I want you to be ready to throw me some questions, people. I'm here for you. Any tax question you have, let's field it and let's knock it out. Here's the last issue. I know some of you are pissed off and freaking out that I said a 10% return. I know they're like, oh my gosh, Mark, what are you crazy? You can't get a 10% return in the Wall Street. If you get 5 or 6% or 8, you're doing great. Okay, listen, and I apologize. I'm going to make someone mad right here. I hate freaking Wall Street. I use money market accounts that are paying four and a half percent for crying out loud. They're paying four and a half percent right now. That's just a freaking checking account at TD Ameritrade. I don't like Wall Street. That's where I park money until I find something better. You want to buy a cute little rental property. You want to do a promissory note to a local small business. You want to buy gold, silver, crypto, bitcoin, starting to roll again. I don't care. I'm not telling you what to buy, but what I am saying, I've got an arch trust company with over a billion dollars of valued accounts. We have clients that are self directing their IRAs, buying what they know, investing in what they know and their average rates of return are 10 to 20% because they're not going through effing Wall Street. Invest in what you know. If your sister in law starting a bakery down the street and you're like, hey, I want 10% of your business, I. I'll throw in 10 grand. You can do that with your IRA and you can give her a loan and say I want 15% or I want 15% of the profits, whatever. Can Merrill lynch do that for you? Can Fidelity any of these big brokerages in Wall Street, Scottrade, Morgan Stanley, whatever. No, they sell you Wall street products which are fine, put your money there until you find something better. So when I say in summary, go drop 6 grand in your Roth IRA, throw it into TD Ameritrade, go buy a low cost fund S&P 500 ETF safe, simple. Then in the next month you sit back and go, hmm, the dollar sucks right now. Or I'm going to buy hard assets and I'm going to pool that money with two or three friends and go buy a cute little rental property. Great, you can do that. And if you're a broker, you're a financial advisor, you're on the web and you didn't know this. That's what I'm about here. You can get to marcjkoler.com, directra.com, our law firm, kqslawyers.com please. Patrick, Tristan, make sure that those links to our firms are in the description down below and get more information. I have a weekly podcast, the Main Street Business Podcast. I've got books on Amazon. I'm not going anywhere. I give away so much free content and it's legit, people. I'm literally a licensed accountant, CPA, lawyer, 10 years of college, a great firm, malpractice insurance license in five states, whatever. I'm not going anywhere. I'm not just throwing out garbage. I'm legit. I can say I'm a lawyer and I'm going to tell you what the hell the law is. So let's do it. All right. So, people, that's your message today. I hope that was generally helpful. I know that there can be some details and some questions you might have. We can go to the whiteboard if you want. Let's do it. Tristan, you filled in the questions or is Patrick. What do we got?

Yeah, I'm going to start with YouTube. Patrick's going to field Facebook. So I have a great question to start. If only our Roth Lord Sorensen was here to compare. This is from PDR or Peter, I guess if you only have enough money to fund either your Roth IRA or hsa, which would you recommend?

Ooh, seriously, Peter? This is. This got to be Peter. He knows the argument, right?

Yeah, I hope so. I'm going to send the Roth IRA versus HSA video.

Okay, we do have a whole video on this debate. Let me explain everybody what this is and let's go to the trifecta. Many of you that have followed me or been to some watch some of my videos. I'd love to talk about what's called the trifecta. And what this is, is an easy way that we structure our clients lives for asset protection and tax planning. So in the trifecta, the base is your revocable living trust or your 1040 tax return. Okay? That's the foundation. So let's put that right here. Water runs downhill, your money runs downhill. Then we're going to put your operations over here and we're going to put your assets over here. All right? Now, you might have a day job, you might have a side hustle, and you might have a little llc, you know, blah, blah, blah. You might have an S corp. Okay, I'm not going to worry about that right now. What I'm worried about is, is this umbrella. I want to be making you wealthy. I want you to be building wealth. Now, some of you might be buying rental property in your own name in an LLC owned by your trust. That's great. Little Airbnb short term rentals. Maybe you have an RV and you're renting it on Waverly. Maybe you're outdoorsy. Sorry, not Waverly. Outdoorsy. Maybe you've got a car and you're putting in Turo over Here you might be driving Uber, but over here, you're using assets to make you money. All right, that's cool. Well, down the middle over here, I want to be building three, maybe four main buckets. The first one is the 401K, which you might be sponsoring yourself and your own small business. You may have a day job. And you have a day job. 401k, that's cool. But then we want to be thinking about your Roth ira, which you can fund every year. No matter if you have a job or not, a day job doing a 401k doesn't matter. And we want to be funding what's called this Health Savings Account. The Coverdell is that little college thing off to the side for you parents out there. Coverdell. Okay. So the health Savings Account can be invested in anything you want. The Roth can be invested in anything you want. That means self directing, which we talk about constantly directed. Ira.com will be down in the description below. We have podcasts there, lots of free webinars. Now, with a Roth, you cannot pull out money until you're 59 and a half, which is fine. You young people, you want that. You want to have this bucket of money waiting for you when you turn 50, 60, 70 years old. Because I meet with clients all the time that are 50 years old and said, I feel like I'm 30. Where'd that last 20 years go? And they have no savings. Do not be that person. So you want to be building this Roth, just $500 a month, just putting it away. Cha ching, cha ching, cha ching. The Health Savings Account can come out anytime for health care. Do you know the number one reason for bankruptcy? Medical expenses? The number one reason people pull money out of their Roth ira? Medical expenses. So why not build up an HSA at the same time you're building up your Roth? You can do that. And maybe you say, mark, I only have $500 a month to put away. All right, let's put 250 here and 250 here times 12. Times 12. So we're dropping three grand in here, we're dropping three grand in here,. And we're building both buckets so that as your life grows, you can pull this money out for medical and you can pull this money out for retirement in the future. Meanwhile, you're buying your little rental properties, you're building your business over here, you're buying rentals over here. But I love both the HSA and the Roth. The hsa, you get a tax deduction. The Roth grows Tax free forever. So they both have their pros and cons, but I really think it's the one, two punch. If I had to do it, I would do a combination of A plus B equals freaking bank. That's what I want to do. So, Peter, thanks for the question. When all else fails, do both. And if you can't do the HSA because you had the wrong insurance one year, go back and keep funding your Roth. Go back to six, Keep killing it. Just go for it. All right, next question. Tristan.

All right, I got this one, Mark. It's from Kelly Nywin. My son is 18 and working part time. In 2022, he made 3K. How much can he contribute to the Roth IRA?

And this is Kelly, and her son is 18.

Yes.

Well, if he only made two, he made three grand or $2,000.

Three grand.

Three grand. If he only made $3,000, he could only put $3,000 in his Roth. Your earned income is your limitation. Now, the reason why I asked Kelly and about her age of her son. Think about this, everybody. Let's say Kelly's over here and she has a little LLC side hustle, and she has a business of driving Uber and maybe doordash, just a little thing on the side, nothing major. Maybe she's doing a little consulting on upwork. And Kelly's out there making 20 grand a year with a little side hustle on top of her day job. That's great. God bless you, Kelly. Well, she can. So her son over here, who's 18 years old, only made $3,000 with his quote unquote day job. So he can take that and put. Now, if he's like, he's already spent the money, that's okay. Kelly can take her money and go. I'm gonna give you gift you three grand. Because she's gonna say, hey, son, you already spent your three grand, but I'm gonna gift you three grand, and let's drop that into your Roth ira. So even though he spent his three grand of earned income on whatever Kelly, mom can gift him three grand, and he can still put three grand in a Roth. That's okay. Now here's next level. Why doesn't mom say, hey, you know what, son? You're a great guy. Let's put you on my board of advisors of my llc. Do you have a quality LLC for your little side hustle with an operating agreement, minutes, and a board of advisors? We set that up with every LLC for our clients. You're not going to get that when you go online and set Up a freaking DOC service entity because you're trying to save a few bucks or we want to save you 10 times that with some killer strategies. So we set up a little board of advisors with your son on the board of advisors. And you're going to pay him three grand because you're going to give him three grand during the year anyway. Like, mom, I need some gas money. Mom, I need some money for school clothes. Mom, I need money for tuition. Mom, I've got a date this weekend. So what's mom going to do? Give him money no more, Kelly. Quit giving freaking son money. No, no, no. Your company is going to give him money in the form of a 1099 for serving on the board of advisors for your LLC. Totally legit. We've been doing this for our clients for 20 years. So now your son gets a 1099 at Christmas for another three grand for helping you in the business for crap you were going to give him three grand for anyway. Now he can put six grand in his Roth and you got a write off for three grand. And he doesn't even pay taxes on the first 12. So Son files a tax return and pays zero. You get a write off for three grand, Son earns an extra three and drops in his Roth. The gross tax free and comes out tax free. Everybody wins, IRS loses. Bam. Kelly, that's next level. So be thinking bigger people. The government and the tax system is built for entrepreneurs. It really is. It's built for business owners. So take advantage of all these strategies. If you're like, holy crap, Mark, I've never heard this. Get over and follow me on social media. Please go hit the bell icon on YouTube. Get over to my website and sign up for my weekly newsletter. I try to make this fun to learn. I've got little workshops. I've got a three day in July. We've got virtual in person. Whatever people find that source to help you better live the American dream. It's not just about making money. It's about saving money. Yin and yang, they kind of go together. All right, next question, guys.

All right, so we haven't had a ton of questions flow in, but I'll just go ahead and start reading some off. All right, this one's from a Queen Lee. The question is, how does the sole proprietor establish an HSA account? She no longer works in corporate America.

Okay, great. Let's go to the whiteboard. So Queen says, I've got a sole proprietorship, so we're going to put little dots around it. And I don't know what her sole prop is? It might be, I don't know, let's just say she's driving Uber. It's just such an easy example. So she's driving Uber, making 15k a year. That's a sole proprietorship. Does she have to have an llc? Nope. Down the road, if she starts making more money, we're going to graduate her into an LLC or S Corp as business goes. But Queen, where you're good now she asks, how do I get this health savings account? Well, the health savings account is not based on your business. You need to have a high deductible health plan. This health insurance plan needs to be high deductible. So when you go to shop for health insurance on healthcare.gov or wherever you're at and what state might have a open marketplace, make sure you get one that is HSA qualified. A lot of times you're going to get a lower premium because it's a higher deductible, which means you're coming out of pocket if something bad happens. Now, by the way, 90% of us are healthy and don't even use our health insurance. So it's okay, get a higher deductible, go out of pocket if you have to, but in the meantime with the lower premium, you're going to start funding that hsa. So if you can drop anywhere from three to seven grand in this hsa, you're going to get a tax write off on your 1040. So when you put that money in tax write off, the money grows in the hsa. It starts to build like a bucket of money. And you can pull it out anytime you want. But the key is the high deductible health plan. And I've got articles on this, videos on this. Just go to Google and type Mark Kohler HSA and the health savings account will come up. You can see some articles and videos where I talk about this specifically. But this is a really powerful structure and the business doesn't matter. All that matters is do you have the right type of insurance and you're good to go. All right, well, let's hit another question, guys. Let's pull me off the white. Let's see what we got.

Okay, so I have a comment. It's somebody says, loved your get out of debt video. Sent it to my daughter. My son didn't need it. He's a young March, a Kohler clone. And then I do have a question. How do you counter inflation after retirement?

Well, countering inflation is a, is a very, very complicated question. And process certain assets you might buy do very poorly with inflation. And other assets you might invest in do well with inflation because you're getting a rate of return that might counteract the effects of inflation. To be honest, I don't. I'm not prepared with a PowerPoint to help explain such a complex concept. But here's my general take on this, everyone. And it's funny, I've had some conversations with family this last week on this. It is so easy in the news to look at what's going on with the dollar and the petro and China and Russia. It's easy to look at Wall street and get nervous. It's easy to see bank failures in Silicon Valley and freak out. It's easy to. It's easy to get caught up in the stress of what's going on with the government and our country. I would really, really encourage all of you. Don't worry about it. Now. Here's why. Here's why. What the hell can you do about it anyway? Maybe you could adjust some of your investment decisions. Buy a little more gold and crypto or real estate and some hard assets. Do a little bit with more with notes. That's fine. But the bigger issue that I see over and over and over again is that people get so freaked out about what's going on in the country that they stop saving. They give up. They don't go out and build wealth. The best offense to deal with what's going on in the government and the world and the dollar and the economy is to focus on your own economy. Save money, make more money, get out of debt. Then I could give a rat's ass what's going on with inflation because you're in control of your own destiny, people. That's your best solution right out of the gate is don't go into a stress paralysis. Don't go into this anxiety analysis where you're like, I don't know what to do, so I do nothing. Just do the basics. Stay out of debt, make as much money as you can, save as much money as you can. Buy hard assets and be conservative. Don't buy the most expensive shiny next thing. Be safe. Now, do I want you to prepare for a doomsday, Have a food storage, have a place you can go that might be off the grid. If you have that wealth that you can build and watch the TV show preppers and start looking at what are some things I can do that if there's a major collapse, fine. But you don't operate your daily life like that. That's the what if zombie apocalypse option. Fine. I've. I've loved that. I mean, I've got some weapons and some ammo and some food and some storage and, you know, off the grid stuff. Sure, I love that. But does that mean I stopped just being a regular good saver, a good economically sound person? No. Stay focused on the basics and then have a doomsday option as needed. And don't worry about it. Don't focus on it. It's too much stress. I can't deal with it myself. Next comment or question that you guys like.

All right, Mark. I have a great one. This one, actually. I don't know if we have 100% clarity on yet, but I know that we've touched on it in the Tax Advisor meetings. Edwin is asking, how can he save and invest in a Roth IRA if he doesn't have a Social Security number.

Okay, well, this is a great question. We've been talking a lot lately with undocumented workers in the country. They play a big part of our economy. I know some of you call them illegals and you have a disdain for that. Others of you are like, I wish I could get this person I love. Citizenship is a very divisive conversation with immigration. But let me just say this, everybody. Whether you are pissed off about people that might come across the border, let me say this. I know through our Tax Advisor program, and I've got a special here. Kirby wanted me to make sure I let all of you know my social media manager on our Tax Advisor boot camp. So I'm going to come to this for all of you that are tax advisors out there or want your accountant up to speed, I got a special for you here in just two seconds. But here's the deal. Through our Tax Advisor program, we are helping thousands of undocumented workers in the country because guess what? They are still required to pay taxes. Do you know I have thousands, through our network, thousands of folks that are paying taxes as a 1040 because they're a resident alien. You're still required, even if you're an undocumented citizen. If you're making money in the US and you use a fake social, all of these people have what's called an ITIN. An ITIN helps you file your 1040. You need to still file your 1040 tax return and they're paying taxes like everyone else. I've got landscapers, housekeepers, mechanics, plumbers, electricians that are undocumented that are still filing a 1040, trying to show good faith to earn Their citizenship. One of the best ways to earn citizenship is to show that I have an ITIN and I'm still paying my taxes. So that's the big overarching issue and I embrace. There's billions of dollars of tax revenue coming in from undocumented. Some of you may think, oh, they just live off the grid.

No.

Thousands, millions probably of undocumented workers in America still pay taxes. They're contributing to the economy. Can they have a Roth ira? Yes. If you Google, how can an undocumented resident alien, meaning they live the majority of the year here, they are supposed to be able to open a Roth ira. Now, the problem is a lot of the financial institutions don't have a system to accept them at directed ira. We are building a system to make sure that if you have an itin, you can still get a Roth IRA and start saving. We have not rolled that out yet. I wish Matt, my partner, was here. He just did a live a half hour ago. We're going to be rolling that out. But the point is, it is technically accurate that an i10 resident alien can fund a Roth IRA. Getting a financial advisory firm to welcome you with open arms is another issue. But I want you saving. I have undocumented buying real estate in LLCs. That's okay. You can fund a Roth IRA. That's okay. Stay tuned. Now, if you're a tax advisor, there's Kirby. You want me to say we're having a flash sale? I've got a tax advisor bootcamp later this month. I think it's on the 24th. Right. Make sure I got the date here. Yep. It is April 24th. From noon to 4. This is four hours of where I'm going to be training tax advisors. Well, I should say this. Tax preparers, CPAs, enrolled agents and preparers on how to be better advisors. If you want to attend. We're doing a flash sale just over Easter. The deal ends on Monday. It's 250 bucks. We're doing $75 off and you get a free calendar, one of my Marc J. Kohler calendars for purchasing as well. Now, to get this special down in the description, there'll be a link and the code will be there as well. So make sure you get that information down in the description and you can get that $75 off and get a free calendar as well. Please come for four hours. I'm going to teach you how to make more money. And at the very least, any of you that are like, well, I want to attend. I'm not A tax preparer. You can attend too. You don't have to be a CPA enrolled agent. You're my. I want to be a better tax advisor to myself. Now I'm not going to be going through 30 strategies in that conference. We're also going to that boot camp. We're going to be talking about how to approach being a tax advisor, how to bill, how to have better systems, how to. What do you teach when you're in a consultation. So please attend if you have any interest in and be a better tax advisor to others and how to make money doing it. It's a wonderful career. All right, next question guys.

All right, this is from Matthew Cruz on Facebook. I have a three year old daughter. Can you explain more about the Coverdale plan? Is the max amount to put in 3K?

Yes, let's do that. Okay, so for any of you out there, what did he say his first name was? Patrick.

Matthew.

Matthew. Okay, Matthew's got a three year old. God bless you. Hopefully you'll get some sleep tonight. Okay. Okay, so here's the deal everybody. I've got some videos on this and I'm going to throw this down. I want to give a technical answer here. Can we go to the whiteboard? If you're trying, if your goal is college savings, maximum college savings for one of your children, college. It's really a three part approach. I really like a three frontal attack at this topic. Now I'm going to put them in the order of importance in my mind. Number one is the Coverdell. All right, now this is like a education IRA at the Coverdell ira. All right, And I'm going to answer Matthew's question on this. That's number one plus number two is a Roth IRA. And then number three is the 529. And if some of you are like, oh my gosh, the 529 is the best. Yeah, go look at the rates of the return on the 529 and all the issues there. This is a Wall street product. And right off the. As soon as you know Wall Street's involved, the word that should come to your mind is fees, expenses and effing Wall Street. I like the Roth and the Coverdell because you can self direct both of these. You can invest them in what you know best, meaning you're going to get a greater rate of return as well and you are in control. So I like both of these for this ability. You cannot do that with a 529. No self directing. All right, so here's what Matthew's asking the Coverdell IRA is $2,000 per child or grandchild. It's really per person. If you're like, oh, I'll have grandma and grandpa put in two grand too. Nope, the total is two grand per person. The deadline this year is April 18th. And you can invest it and grow it and you can put in two grand every year until they're 18 years old. Now, as I did some math there, and we could have some fun with this, he said it was three years old. Okay, so let's put in three years old with zero money right now. And they're gonna retire and they're gonna go to College at age 20. Calculate $267,000. Now, that's with a 10% return because I want you being aggressive. I want you buying, doing notes, real estate, crypto, small business, and really getting creative with your investing over the next 17 years. And I want you to average over to 10% ROI. You can do it. We have an alternative investment summit in June this year and you're following us on our newsletter. You're going to get the sign up the landing page for that to attend on other investments you can do other than Wall Street. But the beauty of this is you can invest this two grand. Now, I will give you a caveat and I've got a backdoor method, Matthew. If you make more than 110 grand and you're single, or 220 grand if you're married, you have to use a backdoor method, meaning let grandpa and grandma put the money in whoever the donor is, into the child's account. There are income limitations on the donor. The income limitation you have to be aware of. So if you call directed ira.com you can set up an account tomorrow. Directed ira.com you can do it online tonight. You can do it over the weekend. But if you need to make a phone call, call on Monday or today before 5 directedra.com we have a back door application so that you can give the money to grandma and grandpa and they can put the money in to your child's account for you because their income's lower than yours. So if you're hitting this income limitation, we got a way around it. Don't worry. So get over to directed ira.com and set up the IRA and fund it before April 18th. Now, once your kids have earned income, and this is like talking about what Kelly asked earlier, I want to put your kids in the business on the payroll and once they have earned income now we can fund their Roth and any Money you put in the Roth as a contribution can come out for college tax free, penalty free. Contributions come out tax free, penalty free. So it's another way. Now the growth stays in there, but this is another way and I'm going to put this in red. You're getting a two pronged approach. You're taking the Coverdell and building it and then you're taking the contributions of the Roth in between those two. If you do it right and you've got 10, 15 years of Runway in front of you, you're going to be okay for your kids education, the 529, whatever. If your family member wants to drop 10 grand in 20 grand, whatever, you go to a state sponsored 529 plan. Good luck figuring out what the actual fees are buried in that plan, what the actual rate of return is in that plan, who knows. But it grows tax free, comes out tax free. And of course it's more flexible moving the money around later because it's Wall street and their lobby is monstrous and they can get Congress to do whatever the hell they want. All right, let's go to another question or two and we'll wrap it up.

Awesome. All right, Mark. Well, as also a reminder going back to that Roth IRA right now, until the 18th of April, we are doing $150 off new accounts. That's March 150 is the code. I actually see a comment that I saw come through Matt's as well that we didn't touch on anime said that she is looking to set up a Coverdell for her kids. But at the $295 annual fee, the 2K contribution seems steep at 15%. Well, anime, that March 150 may change your mind for this first year.

So the setup, okay, let's go to the whiteboard to set up a Roth or a coverdell or an IRA. Our new account fee is typically 295, right?

Yes.

Well, if you use this code, everybody march 150, you get $150 off. Holy crap. So now the benefit of this for any of you that are like, well, that seems steep, I can go to td. Okay, everybody listen this. If there's one big takeaway today. If you say, well, I can go to TD Ameritrade and set up a Coverdell for zero. Okay, that's cool. With this discount code, you can go to directed IRA and set up a new Coverdell, but it's going to cost you 150. So why would I do that? I got $2,000. I go to TD Ameritrade and it's zero. Or I can go to Directed IRA and when it's all said and done, I'm going to have $1,850 because I get a pay. Well, actually you can pay for the, the fee out of your personal account and still end up with 2000, but you're out 150. All right, so you still have 2000 in each account, but you got 150. How to go out of pocket. Why in the hell would you do that? Markets free at trade. Because at TD Ameritrade, you can only buy the crap on their pull down menu. That's it. You buy their ETFs, their, their stocks, their bonds, their crap. With directedra.com, you can say, ooh, I want to buy gold, I want to buy cows, I want to buy real estate. I want to loan someone money. I want to invest in a small LLC with another five people and start a business. You can do that with a directed account. Do you think your rate of return is going to be better than some stupid Wall street product where you have no control over it? That's how rich people get rich. They invest in what they know. So that's why it's worth the freaking $150. Because it unlocks, it unlocks all these investment opportunities that you don't get at the TD Ameritrade. Now, I'm not saying in the meantime, maybe you're like, that's all I can do. I'm just going to do the TD Ameritrade, get a little S&P 500 ETF. Fine, that's great. But as you build more momentum and more snowball and more value in the TD Ameritrade account, now it's up to 10 grand or 15 grand. You're like, now I've got some critical mass. Now I can throw down an investment somewhere else with that money. Fine. Just know that it's out there and you're in control. That's what matters. All right, Patrick, one last question from Facebook maybe.

I think we're all out of Facebook questions. I do have one more from YouTube though. Okay, this one's going to be Carlos Ortega. He says, hi, Mark. Love the videos and the podcast.

Thank you.

He's interested in purchasing a rental in his hsa. Would it be worth it knowing that he is going to have to get a non recourse loan and pay udfi?

Yes, yes, and yes. Now here's why, Carlos. Okay, let's go to the whiteboard. Some people say, well, Mark, if my, he said Roth ira, he wants to use his Roth. If he says, oh, he wants to do with his hsa, all right, that's fine. Okay, let's say Carlos is going to go buy a rental property. Or Carlos might take his HSA and go buy an etf, which is like a mutual fund in Wall street, okay? Or his HSA is going to form an LLC and buy a rental property. Okay? So those are his options. Carlos can do it himself, he can fund his HSA and then just go buy a mutual fund. Or he can go buy a rental property with this hsa. Fair. Okay, so we got Apple, Apple, apple. In the fact pattern. What are my options? What do I want to do? Okay, now I say, and this is where there's a lot of misdirection. A lot of people. Can you move my head over to the far left so they can see that a little better? Thanks. When, if you get a recourse loan on this and you have, you're not going to have taxable cash flow because you're going to be writing depreciation off Carlos. But when you go to sell the rental, there might be a tax called ubti. Okay people, that's a complex point. But there might be a tax on the leveraged amount, not your contribution. UBIT does not apply or UBTI does not apply to your hsa. It only applies to the loan, the leveraged portion of the property when you go to sell it. Okay, everybody has a. But Carlos knows what he's talking about here. He's like, why in the world would I pay that tax? I'm just going to go buy a rental in my own name. I'm going to go over here to the left side and I'm just going to buy this rental in my own name and avoid all this. Well, when Carlos buys a rental in his own name and he goes to sell it, what's he going to pay? Tax? Hmm. On the whole profit, the amount of any profit he's going to pay tax. Over here you only pay UBIT on the profit percentage related to the debt. Okay, now he says, Mark, I can just go buy a mutual fund and not have to deal with any of this crap. Well, let's say you go out and buy a mutual fund and you get a great rate of return, which I think great would be over the average of 10 years, 9%. Let's say you get a really great mutual fund or exchange traded fund and you get 9%. That's great. Now all of you know, if you go out and buy rental property, you're going to get cash flow, you're going to get appreciation, you're going to get mortgage reduction, you're going to get tax benefits that still come through and reduce the UBIT on this. If you have depreciation, it reduces the UBIT amount. But do you know what the average rental property roi when you take all the factors into consideration, not just the cap rate or cash flow, we know that rental real estate is going to return all in all over 25 to 50% on an annual ROI. Once you throw in appreciation, the tax deferred appreciation, the mortgage reduction and the ability to have a cash flow property where you didn't put any more money in. I teach this over and over again. Go to bigger pockets, go to all the big guys on this. Go to. I'm one of the big guys. Go check out the my competition here. Go check it out. You're going to see it. Greater rate of return. So Carlos, here's my answer. If you can get 25 to 50% and still only pay a little bit of tax and net a 20 to 25% ROI, you tell me what's better, paying UBIT and getting a 20 to 25% return or just getting your 9%? Don't get hung up on unrelated business taxable income. Get hung up on what's my net ROI and is it better than Wall Street? See, Yuba is just a cost in the equation. Put in all your costs and go. Oh my gosh. Even with all those costs, I'm still kicking ass. So I'm going to go with the method that gives me the best all overall roi. A lot of the Wall street world wants you to go.

Oh my gosh.

You're going to have. You bet. And you're going to have all this stuff. Yeah, even with ubit, I'm still getting a better fricking rate of return. Oh, now you want to know the master plan here, Carlos? I want you buying rentals in your HSA and in your own name. Do both. Now you're building up tax benefits in your own name and you're building tax free income in your hsa. Do both and don't do Wall Street. That's my take for what it's worth. All right everybody, thanks so much for being here today. I appreciate it. Get over to that link down below if you want to attend the Tax Advisor bootcamp. You'll get a free calendar. You're going to get four hours of great content on how to be a better advisor to yourself or your clients. Just a four hour event during midday, virtual only. It'll be recorded. You'll have access to it for about three months. It'll be on April 24th. Please check it out. And everybody, don't give up. Make sure you're still funding Your Roth, your HSA or your Coverdell in the next 10 days. And don't wait till the 18th. Get this started before the weekend hits, maybe on the 13th or 14th, because you don't want to be calling people on the 18th and everybody's going to hate you and it's going to be hard. It's going to be a pain in the butt. So tackle it on Thursday or Friday next.